New HVAC Duct Sealing Requirement for Property Owners

CALIFORNIA ASSOCIATION OF REALTORS®
Starting October 1, 2005, installing or replacing certain heating, ventilating, and air conditioning (HVAC) equipment may trigger a requirement to test and, if necessary, properly seal the existing ducts connected to that HVAC equipment. The duct sealing must then be independently verified by a certified home energy rater, at least on a random sampling basis. If a building permit is required, the local building department may not issue a permit for installing HVAC equipment until the ducts are properly sealed as verified by a certified home energy rater.

As in any real estate transaction, if a homeowner circumvents permit requirements by changing out HVAC equipment without the necessary duct sealing, the homeowner must disclose that fact to a prospective buyer on the Real Estate Transfer Disclosure Statement (TDS). Also as in any pending real estate transaction, if a seller voluntarily agrees, at the buyer's request, to conduct repairs, such as change out the HVAC equipment, the seller also contractually agrees to comply with governmental permit requirements pursuant to C.A.R.'s standard-form purchase agreements. Finally, as with any item of repair after close of escrow, buyers should ascertain upfront whether their home warranty plans will cover the HVAC equipment, duct testing and sealing, and subsequent verification by a home energy rater.

The new duct sealing rule does not change the law affecting a real estate agent's duty in real estate transactions, and there is no law that specifically places an affirmative duty on agents to disclose the HVAC change-out process to their clients. Nevertheless, as a matter of prudence, C.A.R.'s Standard Forms Committee is currently considering a proposal to add the duct sealing requirements to C.A.R.'s Statewide Buyer and Seller Advisory (SBSA) form.

The new duct sealing rule is fully set forth at California Energy Commission's website at http://www.energy.ca.gov/title24/changeout/.